QUESTION 4

The trial balances of Farro Company follow with the accounts arranged in alphabetic order:

Trial Balances

UnadjustedAdjustedPost-Closing

Accounts Payable...................................... $10,000$10,000$10,000

Accounts Receivable.................................. 2,2003,2003,200

Accumulated Depreciationequipment.... 13,00017,00017,000

Advertising Expense................................... 011,3000

Cash.......................................................... 60,00060,00060,000

Depreciation Expense................................ 04,0000

Equipment................................................. 75,00075,00075,000

Retained Earnings..................................... 82,20082,200102,400

Dividends.................................................. 16,00016,0000

Prepaid Advertising................................... 12,8001,5001,500

Prepaid Rent.............................................. 15,00011,00011,000

Rent Expense............................................. 04,0000

Service Revenue......................................... 96,000105,0000

Supplies.................................................... 3,200700700

Supplies Expense....................................... 2,0004,5000

Unearned Revenue.................................... 23,00015,00015,000

Wages Expense.......................................... 38,00045,0000

Wages Payable.......................................... 07,0007,000

Instructions

Analyze the data and prepare a) the adjusting entries and b) the closing entries made by Farro Company.